The Impact of Violence on Interpersonal and Institutional Trust : Evidence from Mexico

Sammanfattning: Beyond the material consequences, violence can have a great psychological impact on the individual. Violence can cause institutional and interpersonal distrust, and in turn harm economic growth and political stability. As of today, there is more knowledge about the consequences of trust than its determinants, and longitudinal studies are scarce. This paper exploits survey data and disaggregated data on violence from Mexico, a country which since 2007 has experienced a rapid increase in violence. With the use of a Linear Fixed Effects Model, I analyse the impact of municipal level violence on trust in crime-related institutions and in other individuals. I find a significant relationship, robust across different model specifications, between exposure to battles and trust in the federal, state, and municipal police forces. This positive effect is also found for battles involving police forces. Furthermore, I find evidence of a negative relationship between riots and interpersonal trust.